His case is under investigation and is potentially liable to pay a hefty fine

Even as China is softening its one-child policy, one if its most renowned film directors is finding himself in trouble for violating the nation's infamous family planning law.

Zhang Yimou, an Oscar nominee, is in the eye of a controversy after admitting to having three children with his wife Chen Ting. He now faces stiff fine -- and harsh public criticisms -- for breaking China's family planning rules.

China's stringent family planning rules limit most urban couples to one child and most rural couples to two, with few exceptions.

Ironically for Zhang, his troubles come as China announced in November the decision to loosen the policy by allowing couples to have two children even if just one of them is an only child. Last weekend, the standing committee of the National People's Congress, China's legislature, formally adopted the new rules.

Even so, the new rules apparently will not help extricate Zhang, known for movies such as "Red Sorghum," "Raise the Red Lantern," and "Hero," from his current troubles. He also directed the opening and closing ceremonies of the 2008 Beijing Olympics.

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"As a film director, it takes a lot of efforts and good movies for people to remember you, but having excessive children had ruined it all," he said, according to Xinhua, China's state news agency. "I sincerely apologize to everyone on my 'excessive children' case. I admit it's my mistake and I won't blame others for it."

"I will learn my lessons, and I'm willing to cooperate with any investigation from family planning commission," Zhang said.

Local officials decide the amount of the fine. In Jiangsu province, where Zhang's case is under investigation, couples who have two "beyond-the-quota" children may be fined five to eight times the annual income of the couples combined.

If so, Zhang is potentially liable to pay a hefty fine.

"The case is still under investigation," a staff at Wuxi's Binhe Family Planning bureau told CNN. "We will announce the result once we have all information ready."

Zhang's breach of the policy has set off a firestorm, especially among netizens who resent how the rich and famous in China flout rules and policies.

JinqiuT wrote on Sina Weibo, China's Twitter-like microblogging service: "Celebrities should abide laws and rules as common people."

But the filmmaker has defenders too.

"He will raise his children, which has nothing to do with other people," wrote another. "He doesn't have to apologize. He didn't steal others' children. He can afford to raise children and at least his children won't endure hardships."

Zhang is no stranger to controversy.

As one of the most inventive and admired filmmakers in China, Zhang has won numerous awards in China and overseas. Long before his directorial debut of his film, "Red Sorghum" in 1987, he was already widely admired for his stunning camera work.

One of his earlier films, "Raise the Red Lantern" was nominated for a Oscar as the Best Foreign Film in 1992, but it failed to pass the censors in China and was initially banned from local cinemas.

Censors sensitive to Zhang's subtle metaphors banned some of his films from local cinemas, if only briefly. Most of his films focused on the oppressiveness of conservatism.

Like most of his contemporaries who grew up during the Cultural Revolution, Zhang spent three years in the countryside undergoing "ideological remolding." He later worked as a janitor in a textile factory.

In the late 1970s, he taught himself photography and enrolled in the prestigious Beijing Film Academy.